UK companies are upbeat about doing business in India, with 56 per cent of them saying it is getting easier to do business in India and their perception about corruption being a barrier to operating in India seeing a sharp drop, according to a report.
The UK India Business Council's fifth annual Doing Business in India report released on Wednesday is based on the result of extensive discussions, including a round-table in London with Union Commerce Minister Piyush Goyal, and a survey that captured the views of UK companies and higher education institutions on operating environment in India and their reform priorities.
With Brexit on the agenda of UK companies, 26 per cent said that they planned to do more business with India as a direct result of the UK leaving the EU. This will be a further boost to the flow of goods, services and investment between the two countries, the UK India Business Council (UKIBC) said.
"Overall, the survey respondents were positive about India, with 56 per cent stating that it is getting easier to do business in India, and only 21 per cent saying that it has not improved (while 23 per cent were undecided). Perhaps the most positive message in the report for Modi's government is the dramatic drop in perceptions of corruption," the UKIBC stated.
When the UKIBC published its first Doing Business in India report in 2014, over 50 per cent of respondents cited corruption as a top barrier to operating in India. This figure has improved year on year, and in 2019 it dropped to 17.5 per cent.
There is clearly still work to do to eliminate all forms of corruption, but the continued reduction is a positive, the UKIBC said.
However, 'legal and regulatory impediments' continue to be the most persistent barrier to doing business and were cited by 59 per cent of respondents as a major barrier.
"The findings of this report reflect the long-term advantages of the huge and growing Indian market. There have been improvements, particularly in tackling corruption, but there is clearly much still to do to remove the persistent barriers to doing business, particularly when it comes to improving bureaucratic procedures and the application of the tax regime, which is a persistent concern for UK and, indeed, all businesses in India," UKIBC Chief Executive Richard Heald, OBE, said.
Identifying a suitable partner and taxation issues are the next two most cited barriers.
It is therefore no surprise that the most popular reform among UK businesses is 'improving the quality of bureaucracy', with 28.6 per cent of respondents urging the Indian government to act in this area, the UKIBC said on the report's findings.
The second most popular reform request was also related to bureaucracy, with 16.9 per cent of respondents calling for simplification of the Goods and Services Tax.
Maharashtra topped the list of states making most improvement in business environment, followed by Delhi.